While international private equity and venture capital firms have been managing and operating investment funds in China for many years, their hedge fund brethren have found it difficult if not impossible to participate in China's securities market due to tight regulatory restrictions. Some hedge fund managers tried to tap China's securities market indirectly by collaborating with Chinese asset managers as “investment or technology consultant”, thus operating in a regulatory grey area. However, the regulatory landscape for foreign securities fund managers is about to change significantly with the recent new regulatory guidance from the Assets Management Association of China (“AMAC”), China's de facto regulator for the fund industry.
